M/S. KANORIA CHEMICALS AND INDUSTRIES LTD. versus U.P. STATE ELECTRICITY BOARD & ORS.

Citation: [1997] 2 S.C.R. 844 · Decided: 10-03-1997 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
MIS. KANORIA CHEMICALS AND INDUSTRIES LTD. 
v. 
U.P. STATE ELECTRICITY BOARD & ORS. 
MARCH 10, 1997 
B 
(B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.) 
Constitution of India, 1950 : Article 226. 
Interim/interlocutory order or injunction-Effect of-Duty of Court-On 
C dismissal of writ petition-State Electricity Board issued Notification under 
S.49 of Electricity (Supply) Act levying 'late payment surcharge'-Notification 
challenged in writ petition by consumers-High Court granted interim stay of 
operation of Notification-Subsequently, writ petition dismissed-Held : In-
terim order only rendered order/Notification inoperative from date of passing 
of stay order and did not wipe out order/Notification from eiistenc~After 
D . dismissal of writ petition consumers would not be relieved of their obligation 
to pay 'late payment surcharge' for the period stay order had remained 
E 
operative i.e. from date of stay order till dismissed of writ petition. 
· 
Electricity (Supply) Act, 1948 : Section 49. 
Notification-Levied 'late payment surcharge' obliging consumers to 
pay an additional charge of seven paise per day per Rs. JOO on unpaid 
amount of bill-Held : Surcharge not penal in nature-Consumers had 
withheld payment having understood the decision in Adoni Ginning's case as 
relieving them of their obligation to pay interest/late payment surcharge for 
F period of stay of operation of Notification and that they were acting bona 
fid~Hence, rate of payment was reduced to 18 per cent-However, this 
direction was confined only to the period covered by stay orders in writ 
petitions filed challenging notification and limited to the date on which those 
writ petitions were dismissed. 
G 
Practice and Procedure: 
Additional Charge-levy of-By Notification-Demand Notice issued 
on that basis Interim stay/injunction asked for by affected persons-Stay 
petitions worded differentl>-Interim orders made by Court also varied in 
H phraseology-Held : Variation in language immate1ial for grant of relief 
844 
KC.LL. v. U.P. STATE ELECTRICITY BOARD 
845 
The respondent-Board by a Notification had revised the electricity A 
rates/tarilTs under Section 49 of the Electricity (Supply) Act, 1948, The 
Notification provided for 'late payment surcharge'/interest of seven paise 
per day per Rs. 100 on unpaid amount of bill within the specified period. 
The appellant challenged the validity of the aforesaid Notification before 
the High Court. The High Court stayed the operation of the Notification B 
till the disposal of the writ petition. Subsequently, the High Court dis-
missed the writ petition. 
After the dismissed of the writ petition the appellant deposited the 
difference amount between pre-revised and the revised electricity rates. It 
did not, however, deposit the 'late payment surcharge'. Thereupon the C 
respondent issued a notice of demand calling upon the appellant to pay 
'late payment surcharge'. The appellant filed a writ petition before the 
High Court questioning the notice demanding 'late payment surcharge', 
which was dismissed. Hence this appeal. 
On behalf of the appellants it was contended that when the operation 
of the Notification it self was stayed, no surcharge could be demanded 
upon the amount withheld; that the rate of 'late payment charge' was penal 
in nature; that the appellants understood the decision in Adoni Ginning's 
case as relieving them of their obligation to pay 'late payment surcharge' 
D 
for the period covered by the interim order and that since they were acting E 
bona fide they should not be made liable to pay the 'late payment 
surcharge', 
Dismissing the appeal, this Court 
F 
HELD: 1. Stay of operation of order or Notification only means that 
the order which had been stayed would not be operative from the date of 
the passing of the stay order and it does not mean that the said order has 
been wiped out from existence, An order of stay granted pending disposal of 
a writ petition/suit or other proceeding, comes to an end with the dismissal of 
the substantive proceeding and that it is the duty of the court in such a case G 
to put the parties in the same position they would have been but for the interim 
orders of the court. [855-H, 856-A] 
Shree chamundi Mopeds Ltd. v. Church of South India Trust Associa-
tion, Madras, [1992] 3 sec 1, followed. 
H 
846 
SUPREME COURT REPORTS 
[1997] 2 S.C.R. 
A 
2. The grant of stay of a Notification revising the electricity charges had 
not the effect of

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